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Payments will be made using emcash, Dubai’s digital currency. The currency has been launched by emcredit, a state-backed subsidiary of the Dubai Department of Economic Development.

An emcredit spokesperson said:

“To be the world’s first city to offer blockchain-based payment solutions to our residents is an exciting moment for Dubai. It confirms Dubai’s status as an international tech hub.

“Deploying cutting-edge technology such as blockchain is a key priority and is delivering benefits to our citizens in the form of convenience and securities to customers and merchants across Dubai.”

Merchants will accept payments via a bespoke point of sale device called Pundi X POS. The device, made by blockchain payment provider Pundi X, is expected to be rolled out across the country over the next few years.

Pundi X expects to issue more than 100,000 of its devices globally over the next three years.

Dubai blockchain payments: A stable cryptocurrency?

Critics have long pointed to cryptocurrencies’ unsuitability as a medium of exchange because of its volatility. In the time it takes for a Bitcoin payment to process, for example, the value of the cryptocurrency could change significantly enough that the participants would not have agreed to the transaction at its final cost.

There has also been a small but steadily increasing rollout of Bitcoin ATMs. However, these have proved unreliable and come with costly charges.

By contrast, emcash will reportedly be a “stable” digital equivalent of the United Arab Emirate’s currency, the UAE dirham (AED).